Report Summary 1. Investment Ratings - **Iron Ore**: Oscillating [2] - **Coking Coal and Coke**: Oscillating weakly [2] - **Rolled Steel and Rebar**: Weak [2] - **Glass**: Oscillating weakly [2] - **Soda Ash**: Oscillating [2] - **Stock Index Futures/Options (Shanghai 50, CSI 300, CSI 500)**: Oscillating; CSI 1000: Downward [2][4] - **Treasury Bonds (2 - year, 5 - year)**: Oscillating; 10 - year: Rebounding [4] - **Gold and Silver**: Oscillating strongly [4] - **Pulp**: Consolidating [6] - **Logs**: Weakly oscillating [6] - **Edible Oils (Soybean Oil, Palm Oil, Rapeseed Oil)**: Oscillating [6] - **Meal (Soybean Meal, Rapeseed Meal, Soybean No. 2)**: Oscillating weakly; Soybean No. 1: Oscillating weakly [6][7] - **Live Pigs**: Oscillating strongly [7] - **Rubber**: Oscillating [9] - **PX**: On - hold [9] - **PTA**: Oscillating [9] - **MEG**: On - hold [9] - **PR**: On - hold [9] - **PF**: On - hold [9] 2. Core Views - The steel industry's stable - growth policy from 2025 - 2026 does not restrict steel production, which boosts raw material sentiment. The short - term fundamentals of iron ore have limited contradictions and are expected to oscillate at high levels following finished products. The fundamentals of coking coal and coke are weakening, and the black sector is expected to oscillate weakly. The fundamentals of rebar are weak, and it is expected to run weakly. The glass market sentiment has cooled, and the short - term supply - demand pattern has not improved significantly [2]. - The stock index market is generally weak, and it is recommended to control risk preference and reduce long positions in stock indexes. The Shanghai property market's "Shanghai Six Measures" have had a positive effect, and the future property market transactions are expected to rise steadily. The bond market aims for stable and healthy development through the cooperation of the Ministry of Finance and the central bank [4]. - The pricing mechanism of gold is shifting, and short - term data supports the rise in gold prices. The uncertainty of tariffs and concerns about the Fed's independence stimulate safe - haven funds to flow into gold, and gold is expected to oscillate strongly [4]. - The pulp market presents a pattern of increasing supply and demand, but the rising space of pulp prices may be limited due to over - capacity. The supply pressure of logs is not large, and the peak season expectation remains to be verified, with prices expected to run weakly. The raw material supply of edible oils is relatively loose, and they are expected to oscillate in the short term. The meal market is affected by factors such as China's soybean procurement and high supply, and it is expected to oscillate weakly [6]. - The supply of live pigs is affected by weight - loss strategies, and the demand is expected to increase with school openings. The price of live pigs is expected to rise slightly next week. The supply of rubber is affected by weather, and the inventory is decreasing. It is expected to run strongly in the short term. The PX, PTA, MEG, PR, and PF markets are affected by factors such as oil prices and supply - demand, with different trends [7][9]. 3. Summary by Industry Black Industry - **Iron Ore**: The stable - growth policy of the steel industry boosts raw material sentiment. The fundamentals have limited contradictions, and it is expected to oscillate at high levels following finished products. The "restricted production" in the Beijing - Tianjin - Hebei region has little impact on iron ore demand. The global iron ore shipment has declined slightly, and there is no obvious inventory - building pressure under high port clearance [2]. - **Coking Coal and Coke**: The fundamentals are weakening, with continuous inventory accumulation and weakening downstream orders. The supply is increasing, and the demand is at a new low since the second quarter. It is expected to oscillate weakly in the short term [2]. - **Rolled Steel and Rebar**: The fundamentals are weak. The supply will remain at a relatively high level, and the total demand is difficult to show an anti - seasonal performance. The inventory is accumulating, and the spot demand is weak. The rebar 2601 contract is expected to run weakly [2]. - **Glass**: The market sentiment has cooled, and the short - term supply - demand pattern has not improved significantly. The spot price in Hubei has improved slightly, and the key lies in the cold - repair path for the 01 contract. The long - term demand is difficult to recover significantly, and it is necessary to pay attention to the improvement of actual demand [2]. Financial Industry - **Stock Index Futures/Options**: The market is generally weak, and it is recommended to control risk preference and reduce long positions in stock indexes. Different stock indexes have different trends, and sectors such as precious metals and power grids have capital inflows, while sectors such as diversified finance and aerospace and military industry have capital outflows [4]. - **Treasury Bonds**: The yield of the 10 - year Treasury bond has declined, and the market interest rate has fluctuated. It is recommended to hold long positions in Treasury bonds lightly [4]. - **Property Market**: The "Shanghai Six Measures" in the Shanghai property market have had a positive effect, and the future property market transactions are expected to rise steadily, which is expected to lead the recovery of the property market in first - and second - tier cities [4]. Precious Metals Industry - **Gold and Silver**: The pricing mechanism of gold is shifting, and short - term data supports the rise in gold prices. The uncertainty of tariffs and concerns about the Fed's independence stimulate safe - haven funds to flow into gold, and gold and silver are expected to oscillate strongly [4]. Light Industry - **Pulp**: The cost supports pulp prices, but the demand improvement expectation remains to be verified. The market presents a pattern of increasing supply and demand, and pulp prices are expected to oscillate and rise, but the rising space may be limited [6]. - **Logs**: The supply pressure is not large, and the peak season expectation remains to be verified. The spot price is running weakly, and the delivery willingness is weak, with prices expected to run weakly [6]. Agricultural Products Industry - **Edible Oils**: The raw material supply is relatively loose, and the demand for industrial and high - end oil products is increasing. The inventory situation of different oils varies, and they are expected to oscillate in the short term [6]. - **Meal**: Affected by factors such as China's soybean procurement and high supply, it is expected to oscillate weakly [6][7]. - **Live Pigs**: The supply is affected by weight - loss strategies, and the demand is expected to increase with school openings. The price is expected to rise slightly next week [7]. Soft Commodities and Polyester Industry - **Rubber**: The supply is affected by weather, and the inventory is decreasing. It is expected to run strongly in the short term, but the approaching military parade in early September may have an impact on downstream operations [9]. - **PX, PTA, MEG, PR, PF**: The PX price follows oil price fluctuations, and the PTA supply - demand situation has improved. The MEG supply pressure is increasing, and the PR and PF markets are expected to run weakly [9].

Core Viewpoint - The China Interbank Market Dealers Association emphasizes the importance of registered experts in enhancing the quality of financial market development through effective information disclosure and risk revelation [1][2]. Group 1: Registered Experts and Their Role - The meeting highlighted that registered experts are crucial for the "market affairs, market discussions" philosophy of the association [1]. - The focus of registered experts is on information disclosure, particularly the sufficiency of key information [1]. - The aim is to create a "key and useful" information disclosure system that benefits issuers, investors, and intermediaries [1]. Group 2: Discussions and Recommendations - Experts engaged in discussions on the construction of debt financing tool market mechanisms and optimization of institutional design [1]. - Various beneficial suggestions were proposed by the experts during the exchange session [1]. - The experts committed to upholding diligence and fairness in their roles to contribute to the development of the bond market [1]. Group 3: Future Directions - The association plans to continue implementing policies aimed at advancing a multi-tiered bond market and increasing direct financing [2]. - There is a focus on enhancing the effectiveness of registered expert meetings and improving the working mechanism of registered experts [2]. - The goal is to further support and service the high-quality development of the real economy through the bond market [2].

Core Viewpoint - The recent announcement by the Ministry of Finance and the State Taxation Administration indicates that from August 8, new government bonds, local government bonds, and financial bonds will be subject to value-added tax on interest income, marking a significant policy shift in the bond market [1][2]. Background and Reasons - The restoration of value-added tax on new government bonds is a result of multiple factors, including the historical context of tax exemptions aimed at attracting investors to the bond market during its early development [2][3]. - Prior to the comprehensive implementation of the "business tax to value-added tax" reform in 2016, interest income from government bonds was exempt from business tax, and this exemption was extended to local and financial bonds [2]. - As of June 2025, the total bond stock in China is projected to reach 188.11 trillion yuan, reflecting a 14.95% increase from the end of 2024, indicating the growing recognition of bond investment value [2]. Fiscal Impact - The new tax policy is expected to increase fiscal revenue and alleviate financial pressure, particularly for social security expenditures such as childcare subsidies. The Ministry of Finance reported a 1.2% year-on-year decline in national tax revenue for the first half of the year, amounting to 9.29 trillion yuan [3]. Differentiated Impact on Bond Market - The new tax policy will have varying impacts on different types of bonds and investors, categorized into three key areas: 1. **New vs. Old Bonds**: The policy distinguishes between new and existing bonds, maintaining tax exemptions for bonds issued before August 8, which may lead to increased demand and lower yields for older bonds [4]. 2. **Investor Types**: Different investors will face varying tax burdens; public funds and asset management products will benefit from a reduced tax rate of 3%, compared to 6% for banks and insurance companies [5]. 3. **Protection for Ordinary Investors**: The policy includes provisions for ordinary investors, allowing tax exemptions on interest income up to 100,000 yuan per month until December 31, 2027, reflecting a consideration for retail investor needs [6]. Investment Opportunities - To mitigate the impact of the new tax policy, investors are encouraged to focus on products like government bond ETFs, particularly those with a high proportion of older bonds, which will continue to enjoy tax exemptions [7]. - The Ten-Year Government Bond ETF and the Five-Year Government Bond ETF are highlighted as unique offerings in their respective categories, with over 80% of their holdings being older bonds exempt from the new tax [7][8]. - These ETFs also provide advantages such as T+0 trading, pledging, and futures arbitrage, making them attractive to both individual and institutional investors [8].

Group 1 - The core viewpoint of the article is that the adjustment of the value-added tax (VAT) exemption policy on interest income from government bonds, local government bonds, and financial bonds is necessary due to the maturity of China's bond market, with a focus on maintaining market stability and investor interests [1][2] - The new policy will continue to exempt VAT on interest income from bonds issued before August 8, 2025, while new bonds issued after this date will be subject to VAT, ensuring that existing investors are not adversely affected [1][2] - Experts believe that the impact of this policy adjustment on the market will be limited, as the majority of bond investments are made by institutions, and individual investors will not be significantly affected due to existing VAT exemptions for small-scale taxpayers [2] Group 2 - The adjustment aims to reduce tax burden discrepancies among different types of bonds, enhancing the pricing benchmark role of the government bond yield curve, which is expected to promote the healthy development of the bond and financial markets [2]

Core Viewpoint - The Ministry of Finance and the State Taxation Administration announced the resumption of value-added tax (VAT) on interest income from newly issued government bonds, local government bonds, and financial bonds starting from August 8, which is expected to impact the bond market dynamics and investor behavior [1][2]. Impact on Investors - The new policy is anticipated to have a minimal effect on individual investors, as they can still benefit from a VAT exemption for interest income below 100,000 yuan per month [2][3]. - Institutional investors may adjust their asset allocation strategies in response to the reduced after-tax yields, potentially shifting towards investments with better tax advantages or higher returns [2][3]. Market Conditions for Tax Resumption - The previous exemption from VAT for bond interest income was a key factor in the growth of the bond market, but the current robust market conditions justify the resumption of taxation [3][4]. - The demand for local government bonds has been strong, with subscription multiples often exceeding 20 times, indicating a healthy market environment for the tax policy change [3]. Fiscal Sustainability and Economic Regulation - The resumption of VAT on bond interest income reflects a flexible tax policy adjustment in response to market changes, balancing fiscal sustainability with macroeconomic regulation needs [4][5]. - The policy aims to address income distribution between the financial sector and other industries, potentially redirecting funds from bond investments to consumer spending, thereby stimulating consumption growth [5]. Tax Neutrality in the Bond Market - The new tax policy aims to reduce the tax burden disparity between different types of bonds, promoting a more neutral tax environment in the bond market [5]. - By aligning the tax treatment of government bonds with corporate bonds, the policy supports the principle of tax neutrality and encourages capital allocation based on risk and return rather than tax incentives [5].

Group 1 - The Hong Kong SAR government successfully priced approximately HKD 27 billion worth of green bonds and infrastructure bonds under its sustainable bond and infrastructure bond programs, covering multiple currencies including HKD, RMB, USD, and EUR [1] - The bonds are set to be settled on June 10 and will be listed on the Hong Kong Stock Exchange and the London Stock Exchange [1] - The issuance attracted global investors from over 30 markets, with total subscription amounting to approximately HKD 237 billion, representing a subscription rate of about 3.3 to 12.5 times the issuance amount [1] Group 2 - The issuance includes a 30-year HKD infrastructure bond with a yield of 3.85%, a 20-year RMB green bond with a yield of 2.60%, a 30-year RMB infrastructure bond with a yield of 2.70%, a 5-year USD green bond with a yield of 4.151%, and an 8-year EUR green bond with a yield of 3.155% [1] - The issuance of the 30-year HKD bond marks the first time the Hong Kong SAR government has issued such a long-term bond in HKD, contributing to the extension of the HKD benchmark yield curve [2] - The issuance aims to attract and guide market funds to support green projects and accelerate the development of infrastructure projects that benefit the economy and people's livelihoods [2]

Core Viewpoint - In 2024, China's bond market steadily developed amidst complex domestic and international environments, achieving significant results in issuance, trading, product innovation, and institutional construction, playing an important role in serving the real economy and preventing financial risks [1][10]. Market Operation Situation - The bond market issued a total of 79.62 trillion yuan, a year-on-year increase of 12.4%. The total custody reached 177 trillion yuan, up 12.3% year-on-year. Government bonds issued amounted to 22.25 trillion yuan, financial bonds 42.42 trillion yuan, and corporate credit bonds 14.77 trillion yuan [2][11]. - The total market transaction volume was 2735.44 trillion yuan, reflecting a year-on-year growth of 5.2%. Overall interest rates declined, with the 10-year government bond yield falling by 88 basis points to 1.68%. Credit bond yields also decreased, with credit spreads showing a pattern of widening in the short term and narrowing in the medium to long term [2][11]. - Deposit-type financial institutions remained the main bondholders, holding 85.79 trillion yuan, accounting for 55.5%. Non-legal person products held 44.24 trillion yuan, with a growth rate of 23.1%. Foreign investors held 4.16 trillion yuan, accounting for 2.7% [2][11]. Market Operation Characteristics - Government bonds and interbank certificates of deposit played a prominent role, with net financing of government bonds reaching 11.30 trillion yuan, becoming a major support for social financing growth. Interbank certificates of deposit issuance reached 31.5 trillion yuan, with net financing of 4.7 trillion yuan, both hitting historical highs [3][12]. - Significant achievements were made in serving key areas, with green bonds issued amounting to 681.43 billion yuan, sci-tech innovation bonds 1.19 trillion yuan, and debt financing tools for the "three major projects" reaching 527.4 billion yuan [4][12]. - The deepening of opening-up was evident, with foreign institutions holding 4.16 trillion yuan in bonds, panda bonds issued at 141.3 billion yuan, and optimization of the "swap connect" mechanism, enhancing cooperation with Hong Kong's financial sector [5][13]. Product Innovation and Institutional Construction - Product innovation included the introduction of "two new" debt financing tools, corporate asset-backed bonds, and supply chain bill asset securitization, with the issuance of ultra-long special government bonds amounting to 1 trillion yuan to support "two重" and "two新" areas [6][14]. - Institutional improvements involved optimizing the bond issuance pricing mechanism, establishing a "green channel" for green and transition products, enhancing information disclosure systems, and strengthening regulation of the credit rating industry [7][14]. Risk Prevention and Regulatory Strengthening - Risk resolution measures included the Ministry of Finance arranging a debt limit of 6 trillion yuan to replace existing hidden debts, and the five major banks issuing TLAC non-capital bonds worth 440 billion yuan, resulting in a decrease in newly defaulting enterprises [8][15]. - Regulatory measures were strengthened, with the People's Bank of China and the China Securities Regulatory Commission increasing penalties for violations, and the trading association imposing self-discipline penalties on 88 entities [9][15]. 2025 Outlook - The bond market is expected to continue serving the real economy, promote the legal construction of corporate bonds, deepen high-level opening-up, strengthen risk prevention in key areas, and enhance market service quality, providing strong support for high-quality economic development [10][24].

Core Insights - The report titled "China Bond Market Development Report (2024)" was recently released by the Association of Dealers [1] - The bond market in 2024 showed steady expansion, with a total issuance of various bonds reaching 79.62 trillion yuan [1] - By the end of the year, the total custody amount of bonds reached 177 trillion yuan [1] - Bond trading remained active throughout the year, with total transactions amounting to 2735.44 trillion yuan [1] - Overall bond market interest rates experienced a downward trend during the year [1]

Core Viewpoint - The article discusses three new measures introduced by China Securities Depository and Clearing Corporation to enhance the development of the bond market, particularly focusing on credit bond ETFs, facilitating financing for small and medium-sized private enterprises, and reducing certain bond registration and settlement fees [1][2]. Group 1: Credit Bond ETF Development - The new measures include optimizing the bond ETF support mechanism, providing convenience for private enterprises to issue bonds, and continuing to offer fee reductions for bond issuers [2][4]. - The introduction of trading exchange repurchase for credit bond ETFs is expected to improve liquidity, attractiveness, and trading activity of these products, thereby supporting the construction of the credit bond market and attracting long-term capital [2][4][5]. - The eligibility criteria for credit bond ETFs to participate in repurchase transactions include a minimum net asset value of 2 billion RMB and at least five market makers or liquidity service providers [4][5]. Group 2: Expansion of Credit Protection Bond Repurchase - The recent revision of the interim measures for credit protection bond repurchase broadens the range of eligible collateral to include bonds rated AA and above, facilitating access for more small and medium-sized private enterprises [7][8]. - Since the introduction of credit protection repurchase in 2021, it has supported over 100 billion RMB in bond financing for more than 60 enterprises, demonstrating its effectiveness in aiding private enterprise financing [7][8]. Group 3: Reduction of Financing Costs for Bond Issuers - Starting from May 1, 2025, to December 31, 2026, certain fees for green corporate bonds and technology innovation corporate bonds will be waived, along with continued waivers for private enterprise bond issuers [10]. - The ongoing fee reduction measures aim to lower the financing costs for bond issuers, particularly benefiting sectors like technology innovation and green finance, while enhancing market activity [10].